Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 122.20

What you receive for the trigger event

             (1)  The consideration you receive for the trigger event happening must be only:

                     (a)  * shares in the company; or

                     (b)  for a * disposal of a * CGT asset, or all the assets of a business, to the company (a disposal case )--shares in the company and the company undertaking to discharge one or more liabilities in respect of the asset or assets of the * business (as appropriate).

Note:          There are rules for working out what are the liabilities in respect of an asset: see section 122-37.

             (2)  The * shares cannot be * redeemable shares.

             (3)  The * market value of the * shares you receive for the trigger event happening must be substantially the same as:

                     (a)  for a disposal case--the market value of the asset or assets you disposed of, less any liabilities the company undertakes to discharge in respect of the asset or assets (as appropriate); or

                     (b)  for another trigger event (a creation case )--the market value of the CGT asset created in the company (the created asset ).

             (4)  In working out if the requirement in paragraph (3)(a) is satisfied, if the * market value of the * shares is different to what it would otherwise be only because of the possibility of liabilities attaching to the asset or assets, disregard the difference.

Note:          The company may have to pay income tax if an amount is included in its assessable income because of a CGT event happening to an asset you disposed of, or it may have a liability because of accrued leave entitlements of employees. The market value of the shares will reflect these contingent liabilities.



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